easyJet dismayed by Stansted proposal

12 December 2005

News that BAA intends to spend £4 billion at Stansted Airport will send a shiver down the spine of the British travelling public, that’s according to easyJet.

Stansted has flourished in the last few years because BAA took an enlightened approach to airport charges. BAA has now signalled a change to that policy and is proposing to spend around £4 billion on airport facilities and associated transport infrastructure - and is expecting UK air travellers to foot the bill.

Andrew Harrison, easyJet Chief Executive, said:

“In no other line of business can a company like BAA announce such a massive development without listening to any of its customers. Launching a consultation exercise having already announced the final price will be a further waste of everyone’s time and money.

“Today’s announcement contains no assurances on the famously-unpredictable cost of surface access or cross-subsidy from other London airports. This development has the support of no major UK airline and no consumer groups - it is the airport that no-one wants and no-one is prepared to pay for.

ADVERTISEMENT

“BAA seems to have forgotten that Stansted was an unloved white elephant until the charges were dropped to attract the likes of easyJet and in the last few years it has been one of the great success stories of European aviation. But now, BAA seems determined to kill the goose that lays the golden eggs.”

“BAA’s allowable return on capital projects is capped at 7.75% - so it can grow its profits by increasing the scale of its investments. Put simply, it is incentivised to over-build its terminals and runway infrastructure. In the case of Stansted this is a polar opposite to the requirements of the airport users. So, we are calling on the Civil Aviation Authority to control BAA’s excesses by reigning-in their spending plans and avoiding any cross-subsidy from other London airports - if the development at Stansted cannot be self-financing, then it should not be built at all.

“We’ve always said that monopolies rarely act in the interests of consumers. And BAA is still demonstrating a “we know best” mentality reminiscent of its old-fashioned nationalised utility era.”——-